Commercial Marine

YACHT QUOTE

Working closely with marine insurance specialty underwriters, Novamar Insurance Group has been crafting insurance packages to protect a variety of marine businesses since 1987 by tying the necessary coverages together in single, cost effective policies. Such as:

MARINE ARTISANS AND BOATYARDS

Insurance protection for Marine Artisans and businesses engaged in the service or repair of yachts, commercial vessels, and shore side marine related exposures. The owners of these businesses need three different types of liability insurance to cover their exposures. First, they need General Liability protection which will cover them if someone is injured provides products and completed operations coverage which covers them for damages that occur as a result of the work. Second, they need Ship Repairers Legal Liability which covers damage that occurs to a customer’s vessel while it’s in their care custody and control and for which they are legally liable. The third is Protection and Indemnity which covers them if they are operating customers’ vessels for sea trials or repair. Obtaining insurance to cover all these exposures may seem a bit overwhelming, but Novamar has a number of programs that package these coverages together in a single policy and also provide optional coverages for tools and equipment, work boats and pollution.

Commercial General Liability

Marine Artisans Liability (Shiprepairer’s Legal Liability)

Boatyard/Shipyard exposures including haul and launch, blocking of vessels

Owned and Non-Owned Watercraft Liability

Pollution Coverage

Equipment and Tools

QUALIFYING BUSINESSES

Virtually all businesses in the repair or service of vessels are eligible for coverage. Activities include:

Hull repair

Marine carpentry

Topside and Underwater hull cleaning

Rigging and mast/spar building

Painting

Welding

Engine sales, repair, repower

Shrink wrapping and winterization

Marine electronics sales, installation, and repair

Dock and mooring service and repair

YACHT DEALERS/BROKERS

Insurance protection for Yacht dealers and Brokers Customers can be injured while on your premises, during sea trials and demo rides. A Yacht Dealer also has auto liability exposures, employment liability exposures, and pollution exposures. In many cases inventory is a Yacht Dealership’s biggest asset and must be protected from a loss. Because inventory values can fluctuate greatly, they can be covered on a monthly reporting form, which means premiums are paid based on the exact value of your inventory. A Yacht Dealer/Broker may also need to cover owned or rented buildings, contents, docks, vehicles, inventory vessels, vessels in the care custody and control of the Yacht Dealer/Broker, and various tools and equipment.

AVAILABLE COVERAGES

Commercial General Liability

Dealers Inventory

Bailee Coverage

Commercial Property

Commercial Auto

Piers, Wharves, and Docks

Marina Operators Legal Liability

Longshore and Harbor Workers

Jones Act Crew Liability Coverage

Owned vessel coverage

Owned and non-owned Protection & Indemnity Liability

Pollution

Bumbershoot (excess liability) Coverage

MARINA PACKAGES

Marina owners have a variety of exposures that need to be recognized and addressed. Among these are a potential for loss or damage to docks, piers, bulkheads, buildings and contents from a variety of hazards including weather, theft, vandalism, and fire. In addition, liability exposures, such as liability from injury to customers and visitors.

The marina also has a duty and responsibility to provide a safe and secure mooring and may be held responsible for damage to customers’ boats. As yacht values have increased so has the aggregate exposure of yachts that moor in marinas. Total exposures that can easily run into millions of dollars. In addition, marinas typically need to cover commercial autos, owned vessels (workboats), employer’s liability, and pollution liability exposures.

While exposures are numerous, many insurance companies offer marina package policies which will tie all the necessary coverages together in a single, cost effective policy including the following coverages:

Commercial General Liability

Commercial Property

Commercial Auto

Piers, Wharves, and Docks

Marina Operators Legal Liability

Longshore and Harbor Workers

Owned vessel coverage

Protection & Indemnity

Pollution

Bumbershoot (excess liability Coverage)

YACHT / BOAT BUILDERS

A boat or yacht builder faces numerous significant exposures. The first is Builders Risk Insurance, which covers a vessel from the start of construction through the final delivery to the customer. A buyer’s financial interest in his new vessel can also be protected by this type of policy.

A Yacht/Boatbuilder Package Policy should also include coverage for launching as well as Collision Liability and P&I Liability during sea trials.

CHARTER VESSELS

A charter boat, or other vessel carrying passengers for hire has special liability exposures. Maritime law places extraordinary burdens of responsibility on the master of a vessel carrying fare paying passengers.

Hull and Machinery Vessel Policy Coverage

Hull and Machinery policies are written either on All Risk or Named Perils forms. All Risk is more inclusive and is the preferred policy wording providing more comprehensive protection for the vessel owner. With a Named Perils policy, the owner can recover only for losses resulting from a limited list of covered perils listed in the policy, Hull and Machinery covers not only the entire vessel in the case of collision, fire, or sinking, but also individual components like electronics, and engines. Normal wear, and damage due to improper maintenance, usually are not covered, nor is loss of revenue due to engine breakdown.

Protection and Indemnity (P&I) Vessel Policy Coverage

P&I Liability indemnifies (pays) someone for personal injury or property damage caused by an insured vessel. It also pays to defend against lawsuits brought against you. Defense costs and judgments can be significant. An insurance company and insurance broker experienced in the placement of this type of coverage is critical. An experienced maritime attorney going to bat to protect the assets of a vessel owner when in a dispute with a third party claimant is also very important.

Some P&I Considerations

Coverage limit. How much P&I coverage do I need? The standard insurance industry answer is—all you can get. Or, more specifically, what is the value of your business and personal property that would be jeopardized in a major claim?

Typically, marine P&I policies provide coverage limits of $500,000 or $1,000,000. This is per incident, not per person. Excess P & I Liability Coverage is also available and can be “layered” to obtain adequate total coverage limits.

Pollution. P&I policies usually cover accidental discharge of pollutants, such as fuel or oil, resulting from an accident. Pollution cleanup in a sensitive marine environment location can be very expensive, and the vessel owner is liable. Pollution insurance does not cover intentional discharges, nor does it pay fines or penalties imposed by the government.

Crew coverage. If there is a paid captain and/or crew hired aboard the boat, they must be specifically covered in the P&I policy to cover them against injury. Various federal acts like the Jones Act or Death on the High Seas Act can provide benefits to an injured captain or crew.

Passenger medical payments. Good charter boat policies include passenger personal injury coverage, as a “damage control” measure. The limit is relatively low—between $500 and $10,000 and typically with a very small deductible. The injured passenger doesn’t have to sue to receive benefit. This coverage protects both the vessel owner and the underwriter against more expensive claims who have suffered minor injuries but decide to litigate if they aren’t treated to their satisfaction immediately after the injury occurs.

Personal effects. Some charter policies cover incidental personal effects belonging to crew and passengers). The assumption in the insurance industry is that most people have homeowner’s policies that cover cameras, binoculars, fishing rods, clothing, etc. Personal effects coverage is another good “damage control” measure to ensure that no one leaves the boat unhappy.

Business Interruption. Insurance coverage that replaces business income lost as a result of an insured event that interrupts the operations of the business, such as fire or a natural disaster. Business interruption insurance is normally either added to or included in a comprehensive package policy.

Assumption of Risk Forms and Liability Waivers

“Assumption of risk” is a term often found in liability waivers that a passenger reads and signs, acknowledging the boat trip they are about to embark upon has inherent dangers. Signing the waiver assumes the passenger is willing to accept those risks, participate in the activity, and waive his/her rights should an injury occur.

Passenger Vessel Insurance Checklist

Deciding on a Policy

Choose a U.S. domestic company, with an “A” rating or better.

Get a Hull and Machinery policy that pays on Agreed Value not Actual Cash Value

Determine whether Hull and Machinery coverage is all risk (other than specified exclusions) or named perils. The former is more inclusive and usually a better value.

Check deductibles. The higher the deductible the lower the premium, but in the case of minor damage you may end up paying most or all of the claim.

Try to check the underwriting company’s claims payment history with other vessel operators.

Remember that policy terms are flexible and negotiable.

Selecting P&I Coverage

Assess your own exposure, and what assets you have to lose to decide your risk tolerance. Unless you have little in business and personal assets, go for the highest P&I available. Inquire about excess coverage. Consider $1 million minimum or more.

Purchase passenger personal medical on top of the full liability coverage.

Be sure to get pollution coverage.

If passengers will leave the boat during the trip, get shore excursion coverage.